As of Thursday, just after the Jobless Claims number came out, the futures are down 100. What happened yesterday? FDX, BBBY, and KMX say things are good and getting better. Didn’t DE and CAT just raised their dividends recently? Yea, I’m pretty sure they did. Does is matter to these cyclical companies’ stocks? Nope. Their stocks go down endlessly, but you feel like a moron if you sell as they break down, because on the first oversold bounce, they spike up almost to where you bought.

I think it’s safe to assume that everybody has an understanding that Greece cannot pay its debts and never will have the ability to repay in the foreseeable future (at least for the next 5 years let’s say). So the only option is for Germany and the IMF to assume their debts. Trichet would rather stick a needle in his eye than allow the seemingly best option for every country to be carried out: kick them out of the Zone. This seemingly obvious option would nullify the use of Greek bonds as collateral. As we learned from Bernanke’s speech yesterday after the FOMC rate decision, the European banks are loaded up with periphery (PIGS) exposure. And Bernanke told us that our banks are loaded up with European bank exposure. If Greece is allowed to default, the market will have to re-price a lot of risk very quickly. There’s lots of room for error if it’s forced to re-price quickly. The disaster scenario is easy to envision (make sure when you imagine how it will play out, you use the words “systemic” and “contagion” a lot in your vision).

So we have captains of industry telling us that things are getting better, and they are putting their money where their mouths are by increasing dividends and guidance. And we have the “contagion” disaster scenario that is has a good probability of happening but an unknown time frame (Germany will get sick of paying for Greece’s living high on the hog at some point, but there is a long road down which the can to be kicked). Either the market is way wrong in dumping their stocks, or the market is looking out to the horizon and seeing what the captains don’t- rough waters ahead.

We don’t have to pick who wins this macro vs. micro fight. We just have to shorten time frames, ditch the bull market strategies of building positions on the dips, and be willing to sell entire positions on the first sign of strength, keep the rest of our capital in high yielding utilities like SO and REITS like NLY, and trust that we’ll be around with our money in tact to play the next bull market, or the next leg of this bull market. But for now, we assume we are in a trading range or a downtrend until proven otherwise.

This is the hard part of trading, because trend-following technical analysis doesn’t work. You’ve got to be good and candle stick analysis a pick bottoms and tops with lose, but disciplined risk management stops (John Murphy’s Technical Analysis of the Financial Markets is a good place to start for brushing up on the Japanese interpretation of candles). You don’t want to give away your money to the computers, nor do you want to let the market do what it does best: confuse you to the point of inaction.